Back to the basics

Wintertime always seems like a good time to reflect and get back to the source. Hibernation and introspection lead to new insights into self-evident truths in all realms including one’s finances. Recently, someone referred me to The Keys to Wealth by Rabbi Moshe Goldberger. This excellent short book discusses many truisms about money from Talmudic and rabbinic sources that remind me of many of the modern day statements voiced by financial gurus. I felt myself enriched by the book, and wanted to share some points raised there.
• Don’t neglect your finances. We tend to go with the flow and lose sight of the fact that money is a gift that empowers us to accomplish other things in our lives. We always need to focus on the task in hand regardless of whether we are trying to improve our earning power, reduce spending or maximize investing. But we have to remember where our money fits into the big picture in life. We need to use our wealth to achieve our objectives. Most of us feel that money is a means to an end, and not the end in itself, but sometimes we lose that perspective. We all have long term goals, dreams and ideals. And they are not – or should not be – just making it through the month. Are there projects you would like to be a part of? Charitable causes? Creating an environment where your children can thrive? We need to view our money as a conduit to accomplish our goals. That takes energy, time and attention, and unfortunately all too often financial matters are accompanied by psychological baggage. Make the effort to reconnect to your core values which will provide you with an anchor for your day to day struggles.

• Work and invest with integrity. Sometimes we come up short on the integrity scale in our quest and need to make money. We lose sight of the fact that it is far better for us to profit less but operate with integrity. A tainted earned shekel is worth much less than honest accomplishments. In the long term, people trust a person with integrity, although a less honest person may be able to fool people in the short term. However, the most important factor is that ultimately we are better human beings for behaving honestly, and scrupulous behavior will bring us not only long term financial success but also internal satisfaction.

• Be honest with yourself. Don’t put up a charade with your finances. Someone recently told me how at a recent social occasion an acquaintance kept saying how much money he was making. Until it turned out (in subsequent interactions) that he had been making huge losses. No one wants to acknowledge that their finances are less than stable, but if that is unfortunately the case – don’t publicize the opposite.
Act with integrity and consistency. Recognize what you can really afford. Only live a standard of lifestyle that leads to long term stability. Don’t take loans you can’t afford to pay back, and alternatively don’t offer loans, or be a guarantor, if you can’t afford the potential loss should the loan not be returned.
• Make sure you are not a slave to instant gratification, or you will never be able to develop your finances. Our society is so consumer goods driven; we have to have that new gadget or tool. However, if you don’t really have the means to afford the purchase, by buying it you are preventing your savings from growing. Your money needs time to accumulate. That’s the beauty of the Israeli savings system, where you are forced to put away a chunk of savings monthly which can form a good base for your long term savings.
The best way to distance yourself from instant gratification is via long term planning. Have a proper savings plan in place and you’ll find that that can help you to say “not now”. Today’s resources need to suffice for the known future expenses (eg. weddings, retirement etc) and not just for making it through the month. A plan can provide clarity for you to be able to see when the purchase makes sense and when it doesn’t.
Attitude. A positive attitude can impact many aspects of your life, including your finances. Try and steer clear of sending negative financial messages to yourself and your family. Be aware of how often you say comments like “we can’t do this” or “we can’t afford this”. Obviously there will be many occasions when you can’t or won’t do something because of the cost, but if you view it only in the negative you are also passing on a negative message to your dependents. Instead say something along the lines of – “we are choosing not to buy something or go somewhere because it doesn’t fit into our plans or priorities given our resources”. With a proper savings plan it will be clear to you that the reason for not spending money on an item or event is because you are saving towards something else that you value more than the current outlay – this will help to create a positive dimension to your financial situation.
Living a more positive lifestyle also helps you be happier with your lot, even if it’s a more modest one. As Pirkei Avot explains, “who is truly rich? He who is happy with his portion”.
Sometimes people are so afraid of not making it through the month that their negative thoughts can cause anxiety and stress. Negative thoughts can be paralytic, where positive thoughts are liberating.
Change your mindset. Go back to the basics. Work on absorbing the truisms into your life. View your finances in a positive light as a means to achieve your greater goals and hopes. Money is crucial, but just make sure that you control your finances, rather than letting them control you. And you will find that you are taking significant steps towards a more meaningful and satisfied existence.